`New Deoleo CEO Inherits Legal and Financial Challenges - Olive Oil Times
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New Deoleo CEO Inherits Legal and Financial Challenges

By Daniel Dawson
Dec. 30, 2024 16:12 UTC

As 2025 gets under­way, the recently appointed chief exec­u­tive of the world’s largest olive oil bot­tler faces sig­nif­i­cant head­winds.

Deoleo’s board of direc­tors named Cristóbal Valdés as its new chief exec­u­tive in September, replac­ing Ignacio Silva, who was appointed to the role in 2019.

Valdés for­mally took charge of the com­pany at the end of November, with Silva tran­si­tion­ing into a non-exec­u­tive role as pres­i­dent and chair­man of the board.

“I am hon­ored to join Deoleo as its CEO,” Valdés wrote on LinkedIn. ​“My vision is clear: to strengthen our mar­ket posi­tion and remain at the fore­front of inno­va­tion while pri­or­i­tiz­ing the well-being and growth of our employ­ees.”

See Also:Deoleo North America CEO Says Sustainability is Key to Growing Olive Oil Sector

Valdés, who holds a law and eco­nom­ics degree from the University of Deusto and a Master’s in Business Administration from IE Business School, started his pro­fes­sional career as a prod­uct man­ager for the super­mar­ket chain Carrefour.

He con­tin­ued to climb the cor­po­rate lad­der, work­ing as an inter­na­tional prod­uct direc­tor for France-based ADEO Services before becom­ing the chief exec­u­tive of mar­itime logis­tics firm Bergé Marítima and later the boss of Europe’s sec­ond-largest canned food pro­ducer, Jealsa.

Valdés cur­rently serves on the board of direc­tors of Meliá Hotels International, pro­vid­ing the sea­soned exec­u­tive with a wide range of per­ti­nent expe­ri­ence for his new posi­tion.

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Valdés brings decades of experience in food packaging, hospitality and international product management to Deoleo. (Photo: Cristóbal Valdés via LinkedIn)

While Silva told La Vanguardia ear­lier this year that Deoleo is in a much stronger finan­cial posi­tion than when he was appointed, the com­pany has faced a series of set­backs through­out the sec­ond half of 2024.

Silva expects the com­pany to fin­ish the year with about €100 mil­lion in debt, down from €572 mil­lion in 2018. According to the com­pany, Deoleo recorded an oper­at­ing profit of €500,000 in the first half of 2024 com­pared to losses of €10 mil­lion in 2023.

However, a recent rul­ing from an Italian court over a decade-long tax dis­pute resulted in rat­ings agency Moody’s down­grad­ing Deoleo’s credit rat­ing amid its effort to refi­nance €160 mil­lion of debt.

In November, a court in Milan ruled that Deoleo must pay €89 mil­lion in back taxes and inter­est for Italian sub­sidiary Carapelli Firenze SpA’s olive oil imports.

The dis­pute stems from a legal maneu­ver employed by Carapelli to import olive oil from out­side the European Union through a Swiss sub­sidiary to be later bot­tled in Italy and re-exported out­side of the E.U.

Switzerland is not a mem­ber state but has a free trade agree­ment with the E.U.

Deoleo said it under­stood this prac­tice to fall within a European cus­toms law exemp­tion, allow­ing it to avoid pay­ing tar­iffs on olive oil imports.

However, Italian cus­toms offi­cials dis­agreed and opened a case against Carapelli in 2014. Deoleo has appealed the rul­ing, and the company’s legal advi­sors are assess­ing the chances of suc­cess to deter­mine how this may affect its finances.

In the mean­time, Moody’s down­graded the company’s credit rat­ing from B3, which is ​“sub­ject to high credit risk,” to Caa1, mak­ing it a ​“bond of poor stand­ing” with a neg­a­tive out­look. It also down­graded the rat­ing of the €160 mil­lion loan, which matures in June 2025.

The Moody’s ana­lyst respon­si­ble for the rat­ing said the change ​“reflects the risks related to the unfa­vor­able rul­ing received from the Italian court… If this deci­sion is upheld, it has the poten­tial to weaken Deoleo’s finan­cial pro­file.”

The ana­lyst added that this could com­pli­cate Deoleo’s ongo­ing efforts to refi­nance its 2025 and 2026 debt matu­ri­ties, which could have a ​“mate­r­ial impact on the group’s finan­cial pro­file and liq­uid­ity.”

However, Deoleo said the rul­ing ​“has had no impact on the group’s finan­cial oper­a­tions, which con­tin­ues to oper­ate its busi­ness and meet its com­mit­ments as nor­mal.”

The com­pany added that it had noti­fied it noti­fied its two major share­hold­ers, CVC and Alchemy, who remain sup­port­ive and expressed con­fi­dence in the group’s strat­egy to refi­nance the debt.

“Relevant share­hold­ers have expressed their sup­port for Deoleo, and the company’s legal team is work­ing with its advi­sors to request a stay of exe­cu­tion of the rul­ing and to appeal it to the Italian Supreme Court,” Deoleo told Spain’s finan­cial reg­u­la­tor.

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